Western Australia is seeking an urgent refund from Deloitte after paying A$166,000 for a cost-benefit analysis concerning the merger of the University of Western Australia, Curtin University, and Murdoch University that contained phantom AI-generated citations and flawed financial sums.
The Flawed University Merger Study
The state government commissioned the review to evaluate a proposed structural consolidation of three institutions. Deloitte delivered the study after utilizing generative artificial intelligence tools to aggregate research, summarize text, and proofread documentation. However, independent checks revealed that the report included references to non-existent sources, alongside mathematical discrepancies in the financial appendices.
Guardian Australia identified a specific discrepancy within the report’s financial breakdown. Two separate costs associated with a potential Curtin University and University of Western Australia merger totaled A$659m when evaluated together, yet the document listed the combined sum as A$399m.
State Authorities Demand Refund After Deloitte Study Errors
Errors in the document first surfaced in October following public scrutiny on social media, with a user on Reddit flagging the fabricated references, Times Higher Education reported. Deloitte initially characterized the phantom citations as minor errors. State authorities instructed the firm to correct the citations and reissue the study.
Subsequent investigations exposed the miscalculated figures in the appendix. A government spokesperson stated that officials were very disappointed and had formally written to Deloitte to expedite the refund. The state administration maintains that the mathematical errors do not alter the underlying modelling or the broader strategic findings of the report. Deloitte is slated to correct the figures and reissue the document, though the firm did not respond to inquiries from Guardian Australia.
This incident follows a nearly identical compliance failure involving the professional services network. In 2025, Deloitte agreed to issue a partial refund to Australia’s federal government after an A$440,000 advisory report similarly contained generative AI errors. Across the consulting sector, rival firms KPMG and PwC have faced comparable scrutiny this year over inaccuracies stemming from automated document generation.
